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Duty hike prompts slowest London prime property price growth in 6 years

[LONDON] An increase in a property levy paid on top-end homes in London and uncertainty over future tax changes saw the lowest price growth in the capital's prime property market in just over six years, a consultancy said on Wednesday.

Knight Frank's prime central London index rose just 0.9 per cent last month from a year ago, the lowest annual growth since October 2009.

Britain cut its stamp duty tax, which is paid when a home is bought, for most buyers last December, but those buying million-pound homes saw the amount of tax increased, affecting many London properties.

In some of the capital's most sought-after areas such as Knightsbridge, home to department store Harrods, and Chelsea, where properties regularly sell for well over 1 million pounds, prices fell in November.

Knight Frank said that an increase in stamp duty on second homes and for those buying properties to rent them out, added uncertainty. "The Chancellor's latest announcement came as tentative signs have begun to emerge that buyers and sellers are adjusting to previous stamp duty changes," Head of London Residential Research Tom Bill said in a note.